Some 11,000 troops and 120 aircraft took part in the event at an air base south of Seoul, which showed off the military's most advanced weaponry, including a cruise missile capable of surgical strikes on the North Korean leadership.
The guest of honour was US Defence Secretary Chuck Hagel -- on a visit to underscore US commitment to its military alliance with South Korea where 28,500 US troops are currently stationed.
"The situation on the Korean peninsula ... is very grave," Park warned in her speech at the event marking the 65th anniversary of the founding of South Korea's armed forces.
"North Korea adamantly continues to develop and upgrade its nuclear weapons," Park said, adding that the South had no option but to boost its military deterrent in response.
She specifically cited the development of sophisticated missile interceptor systems capable of neutralising a North Korean strike.
"I believe that the true purpose of the military lies not in fighting a war but preventing one," she said.
Among the hardware on display was the Hyeonmu 3, an indigenously developed cruise missile that was first deployed on naval destroyers in November last year.
Two days after North Korea carried out its third nuclear test on February 12, the South's defence ministry called in the media for a video presentation of the Hyeonmu's capabilities.
"It is a precision-guided weapon that can identify and strike the office window of the North's command headquarters," ministry spokesman Kim Min-Seok told reporters at the time.
The North's nuclear test triggered two months of heightened military tensions on the Korean peninsula, with Pyongyang threatening pre-emptive nuclear strikes on South Korea and the United States.
Those tensions have eased since, but acute concerns remain over the North's nuclear programme with signs that it is expanding its production of weapons-grade fissile material.
South Korea has cited the growing nuclear threat from Pyongyang to back its request for extending US command of combined US and South Korean forces in the event of war with the North.
South Korea is scheduled to take over wartime operational command in 2015, but defence policymakers now say they need more time to prepare for the transition.
Hagel will discuss the issue with his South Korean counterpart Kim Kwan-Jin on Wednesday.
Tuesday's display at the air base was to be repeated later in the day with a mass military parade in downtown Seoul -- the largest since 2003.
Such displays are generally considered more of a North Korean speciality, with massive, highly-choreographed parades of goose-stepping intensity regularly staged in Pyongyang.